According to Chaoxiang Research, citing Morgan Stanley’s latest weekly note, Meta is developing internal cloud services. The bank argues that this should not be seen merely as a competitive move against AWS and Azure. In its view, the more important driver is persistent GPU supply tightness. Morgan Stanley said that when even the companies with the strongest in-house buildout capabilities are scrambling for capacity, it is a sign that the market has entered an extreme scarcity phase.
May SIA data and inventory structure point to supplier power
Morgan Stanley said May SIA data showed year-over-year growth of 16.1%, below the market’s 22% expectation, but underlying category performance remained strong. DRAM rose 54.8% month over month, marking the strongest monthly increase since 2001, while NAND prices jumped 281.6%. At the same time, the inventory picture sent a reverse signal: chip company inventory stood at just 114 days, well below the historical median, whereas distributors and end customers continued to hold elevated inventories, suggesting ongoing stockpiling behavior.
Based on that reading, the bank said the data does not signal demand deterioration or a broader market downturn. Instead, it reflects a market in which suppliers retain dominant pricing power. Using semiconductor capacity build cycles as its framework, Morgan Stanley projects that GPU shortages will continue through the end of 2027, while DRAM shortages may persist into early 2028. In terms of names to watch, the report remains constructive on NVDA’s pricing power, AMD’s potential share gains tied to warrant-related arrangements, and the capacity ramp pacing of MU and SNDK.
